CSLR revises down adviser levy
The Compensation Scheme of Last Resort (CSLR) has released its revised levy estimate for FY26.
Financial advisers won’t get any relief from the $20 million subsector cap, however the revised estimate for the 2025–26 financial year is down to $67.3 million for personal financial advice.
Compiled in conjunction with the CSLR’s principal actuary, the revised estimate for the 2026 financial year has been calculated at a total $75.7 million, down from the initial estimate published in January of $77.98 million.
According to the CSLR announcement, the need for a revised estimate was triggered due to the initial levy estimate exceeding the $20 million cap for the personal financial advice subsector.
While the revision is a long way off impacting the subsector cap, the cost attributed to financial advice has fallen from $70.11 million to $67.29 million, which is the largest change of any sector.
The CSLR added that it has now notified Financial Services Minister Daniel Mulino of the need for a special levy of $47.29 million.
David Berry, CEO of the CSLR, said the harm caused by those in the finance sector doing the wrong thing disproportionately impacts and detracts from those acting correctly, noting that the rate and number of firm failures show little sign of abating.
“While we are disappointed at the need for a special levy, we recognise these funds provide a measure of compensation for those who have experienced lengthy and stressful financial loss,” Berry said.
“The CSLR continues to operate in alignment with the legislative framework in a manner that is effective, efficient and economical as we strive to increase consumer trust across the financial services sector.”
The securities dealing subsector, on the other hand, saw a considerable increase in its estimate, which now sits $2.4 million higher at $4.7 million.
The CSLR said this would be funded by its cash reserves and recovered in the FY27 annual levy for securities dealing.
Reacting to the announcement, the Financial Advice Association Australia (FAAA) chief executive, Sarah Abood, said the organisation is concerned a reduction this year will push costs into the following year instead.
“The reduction of $2.8 million in the total estimated CSLR cost for the financial advice sector for 2025–26, from $70.1 million to $67.3 million, is because of a delay in the processing of known complaints, not a reduction in expected claims. Effectively this will push a significant additional cost into the 2026–27 year.
“Some of the key developments since the January 2025 initial estimate are an increase in complaints, of 350, for UGC (many of which will not be processed until 2026–27), and the increasing prominence of Brite Advisors, where the revised estimate includes only 10 claims out of the 618 complaints that AFCA has already received.
“Further, and most importantly, these numbers do not include any allowance for the impact of either Shield or First Guardian, although numerous announcements by ASIC suggest these are very substantial matters where financial advice complaints are likely.”
AUTHOR
Keith Ford
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